Over the past year, the Bitcoin community has been deeply, possibly irrevocably, divided over what seems like a simple question: How do we scale Bitcoin to handle the rest of the world? There are many different approaches that can be taken to scale. Every approach has its own set of pros and cons. Some approaches attempt to modify the base protocol of Bitcoin. Others attempt to build a second layer on top of Bitcoin in an effort to avoid changing the protocol. A few people even believe that we shouldn’t make any attempt to scale at all, and that Bitcoin should not be used by the average individual.

As tends to happen when ideologies clash, those aware of the debate have taken sides. And the discussion has fractured the community. Two main camps have formed. One group is in favor of a “hard fork” to change the protocol, allowing the miners to determine the block size in the future. The other group favors a solution that moves the bulk of transactions to a second layer, and uses the original protocol, unchanged, as a settlement layer. Ironically, the two proposals aren’t mutually exclusive. It is entirely possible to take both approaches, in any order. But both solutions diminish the immediate need for the other, and since a lot of time, money, and energy have been invested in the development and promotion of each method, the proponents of both have determined that their idea should be the first adopted. It’s gotten very political.

Politics is never pretty. It’s never polite. It’s never friendly. The block size debate is no exception. Proponents of each side have resorted to name calling and character attacks, conspiracy theories about the motives of the other side, denial of service attacks, misinformation campaigns, and censorship of dissenting opinions in the main discussion channels. It’s gotten ugly, and there is now a lot of bad blood between members of the two camps. It will be difficult at best and may prove impossible for the community to put itself back together. Many wonder if this debate could be the downfall of Bitcoin.

But something which may have been forgotten in all the vitriol, is that Bitcoin is actually designed not only to survive, but actually to thrive under these conditions. This is because Bitcoin was created using the economic principals known as Game Theory. This system is used to predict how a system will react to conflict, competition, and different motivational incentives. Game Theory economics is far too complicated a topic to discuss here, but the essential idea is that rational “players” will always do what is in their best interest as an individual. There may be times when it is in a player’s best interest to compete with others, and there may be times when it is in a player’s best interest to collaborate with others. There will always be winners and losers, but both competition and collaboration are considered healthy, and will eventually balance each other out in such a way that the system as a whole is improved and strengthened by the lessons learned over time.

The Bitcoin community is right now in the midst of a fierce competition of ideas. But one thing is certain. It is in everyone’s best interest to find a scaling solution. So, it will eventually happen, and Bitcoin will be better for it.


*Jim Phillips is Co-Founder and CTO of Golden Frog Technology Services, S.A. He has been a pioneer in Panama in the creation of platforms for Cryptocurrencies and international advisor of several business models
that have implemented Bitcoin.

Golden Frog Technology Services, S.A.

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